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Frustrating Management Trends!!!!!!

Discussion in 'Bidding & Estimating' started by big acres, Oct 8, 2008.

  1. big acres

    big acres Senior Member
    Messages: 653

    The all inclusive contract... I am seeing more and more of these, mainly in HOA Management. They want a seasonal flat rate for basically unlimited snow, made in monthly payments. Besides basic plowing and shoveling, they want:

    Salt & Ice melt, Drift plow & Shovel, Slush Plow, Pile pushing & relocating, manager call-outs -you name it it's in there. The real problem is not only that they look shocked when you propose a "cap" to the service included, but that they typically only do 1-year contracts!

    The 100 year average here is 43.5 inches, we have been in a dry spell for nearly ten years and alot of guys have gotten in since then and do not know a real winter, so their bids go out at the same rate as basic plow service and they figure a little extra service here and there should take care of the extras.

    I build the extra time and materials into our bid, and regularly price myself out. Why any manager would want their HOA to pay for move piles that may never exist is a mystery to me. Why anyone would gamble on doing it for free is a bigger mystery.

    Give me a 3-5 year deal, and the law of averages comes into play, but 1-year??? If the big one hits, vendors will send cancellations before they go bankrupt and leave them hanging mid-season... good luck finding a new one. T

    This is falling on deaf ears so far. Large companies with 30+ managers are adopting this contract company wide and it is becoming a significant part of our market. Is anyone else seeing this and how are you handling it?
  2. elite1msmith

    elite1msmith 2000 Club Member
    from chicago
    Messages: 2,762

    thats almost all i bid for on HOA , but most dont incude hauling.... thats the only difference , i win lots of bids because i am of the few that put no cap on my contracts

    and your right about the law of averages... you just need to hope that you do a great job , and they hire you back,..it might not be as nice as a multi year deal, but then that law does come into play in some form
  3. big acres

    big acres Senior Member
    Messages: 653

    elite... how long have you been at it, and have you ever been hung by a big winter and had your labor cost kill all profit? Congrats if you have enjoyed typical winters so far, but couldn't one big year really jeapordize the health of your biz?.

    The contract does not include hauling, but I didn't mention the dustings that accumulate to the trigger depth. Normally, we put out OUR contract for basic plow service, and then exceed that by far... even throwing them some skid hours as a bonus here and there, but this type of contract is newer here in Minneapolis.

    We have been doing HOA for over ten years... nearly 1500-2000 units currently. So far, I can only hope that our diverse clientle of HOA, Retail, Commercial, etc... will save us if we sign a couple of all-inclusives and have a big year. Thanks for the reply.
  4. PLCI

    PLCI Member
    from Maine
    Messages: 31

    I would recomend asking the the property manager to meet the association board and discuss the RFP w/ them. It works for us about 50% of the time. We take the time to listen to their needs and we explain our snow operations and what our bids include. Then we submit the bid, in person explaning the changes we have made to the RFP and why. Bottom line the RFPs out there don't nessicarly fit the needs of the consumer! SIMA is a great resource for infomation and they have a page on their website for property managers


    Good Luck!
  5. elite1msmith

    elite1msmith 2000 Club Member
    from chicago
    Messages: 2,762

    i have not been doing them 10 years, but im sure it will work out in the end if you do a good job
  6. RLM

    RLM PlowSite.com Addict
    Messages: 1,270

    Almost all the work we do is per season. Exception is hauling (never had to do) & stacking. It makes there budgeting easier thats why they do it. Yes some years are better than others but I have yet to lose money & I have been doing this since 1995. If you do a good job most will keep you but you need to sell them on the fact you have a reliable track record, overservice, etc. We have some custmer that we've had since the beging or there about, I send out a renewal in Spring without a price increase, they generally do.
  7. Ipushsnow

    Ipushsnow Senior Member
    Messages: 314

    Including hauling is something that can bite you. Are they going to ask for snow to be hauled out every other storm? If you don't put a cap on it they will!
  8. Superior L & L

    Superior L & L PlowSite Veteran
    from MI
    Messages: 3,035

    We started doing contracts with caps this season.

    The best thing IMO is 60% monthly and the balance per push. That gives you enough monthly for salarys, rent, trucks, gas, insurance etc etc etc. Then if you have a heavy winter the per pushes will give you the bigger profits and help cover the additonal wages andn gas and break downs and transmissions and material costs
  9. big acres

    big acres Senior Member
    Messages: 653

    Overall, I agree with this... and that's a good ratio. I know of a few cos who do lots of work, nearly exclusively under this type of contract... but they have not seen an above average winter here yet and will be in trouble if we do. Last year, Madison, Wi, like many of you in the NE, saw double the average (90+). I tell customers that this is not very far from us... slight change of the jet stream and we could see it too. Sometimes its hard to keep the big picture in mind when you look at it by account and see potential losers. Thanks.